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PRECIOUS-Gold jumps 1% as dollar slides on stimulus bets

 (Updates prices)
    * Spot gold headed for weekly gain of 1.2% 
    * Technical momentum could take gold to August highs
-analyst
    * Silver up about 5% this week
    * Interactive graphic tracking global spread of coronavirus:
here

    By Arundhati Sarkar
    Oct 9 (Reuters) - Gold climbed more than 1% on Friday as the
dollar retreated to a near three-week low and increased bets for
fresh U.S. stimulus pushed investors to bullion as a hedge
against likely inflation.
    Spot gold        rose 1.5% to $1,920.92 per ounce by 1:31
p.m. EDT (1731 GMT), en route to a second straight weekly gain,
of about 1.2%. U.S. gold futures        settled up 1.6% at
$1,926.20.
    "It seems like a lot of optimism is being built around it
(U.S. stimulus)" and "that's really at the forefront" of gold's
move, said Eli Tesfaye, senior market strategist at RJO Futures.
    A further drop in the dollar could add more fuel, and given
the strong technical momentum, bullion could soon hit highs seen
in August, Tesfaye added.
    After stalling talks with Democrats on a comprehensive aid
package earlier this week, U.S. President Donald Trump called
for a "skinny" relief bill that would include a bailout of the
struggling airline sector.                          
            
    Additionally, a widening lead for Democratic presidential
candidate Joe Biden has raised the prospect of further stimulus,
adding to gold's allure. 
    The dollar meanwhile        slid as expectations grew for a
Biden win, making gold cheaper for those holding other
currencies.                    
    "In fact, the long gold trade is likely agnostic to the
election outcome," TD Securities analysts said in a note. 
    "Barring a split government outcome, both administrations
are likely to push through a large-scale fiscal deal in no time
that would help de-bottleneck the real rate suppression, lifting
precious metals in the process."
     Near-zero interest rates and unprecedented money printing
by central banks to ease the economic blow from the coronavirus
pandemic have driven a 26% rally for gold this year.
    Silver        jumped 4.4% to $24.87 per ounce and is up
about 5% so far this week. Platinum        rose 2.6% to $884.28
and palladium        climbed 2.9% to $2,440.68 per ounce.

 (Reporting by Arundhati Sarkar in Bengaluru
Editing by Chizu Nomiyama and Marguerita Choy)
  
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